Korean Air secures EU approval for Asiana Airlines take-over

Korean Air has achieved a significant milestone in its prolonged pursuit of acquiring Asiana Airlines, with the European Union’s (EU) antitrust agency granting approval. The national flag carrier now awaits the U.S. Department of Justice’s decision, the last hurdle before the completion of the acquisition, as revealed by Korean Air on February 13.

Overcoming a major obstacle in the mega-sized deal, the airline is on the brink of launching the combined entity, contingent on potential approval from U.S. authorities. While no timeline has been provided by the U.S. Department of Justice, Korean Air aims to wrap up the entire process by the end of 2024.

The European Commission (EC) had voiced concerns regarding potential competition issues and urged the carrier to divest Asiana’s cargo freighter business. Additionally, the EC recommended facilitating the entry of a new airline on four overlapping passenger routes between Korea and the European Union.

In response to the EC’s recommendations, Korean Air outlined steps to address these concerns, including appointing an advisory firm to oversee the divestment process and initiating a bidding process to select a buyer for the cargo business. The airline emphasised that EC approval of the selected buyer is essential for the deal’s closure, with the actual cargo divestment process slated to occur after Korean Air completes the acquisition.

Korean Air also highlighted its commitment to addressing competition concerns on specified European passenger routes by designating T’way Air, a Seoul-based low-cost carrier, as a remedy. The plans include assisting T’way Air in commencing operations on four routes from Incheon to Paris, Rome, Barcelona and Frankfurt in the second half of this year.

With negotiations focused on the U.S. authority for the timely completion of the deal, Korean Air, which announced the takeover plan in November 2020, has diligently filed notifications with a total of 14 competition authorities worldwide.